CreditAccess Grameen to infuse Rs 250 crore in subsidiary Madura Micro Finance

Microfinance firm CreditAccess Grameen will infuse up to Rs 250 crore of capital in its subsidiary Madura Micro Finance to augment the capital adequacy ratio of the latter.

The fund infusion will be in the form of subordinate debt or perpetual debt and would be made in tranches, the company said Tuesday after its board meeting.

"This is a precautionary measure. We want to ensure that Madura has adequate growth capital till it is merged with us," CreditAccess Grameen managing director Udaya Kumar Hebbar told ET.


Madura has its capital adequacy ratio close to 20% at the end of September, but it may come down with steady loan growth without the capital infusion, Hebbar said. 'We don't want such a situation. We would like to keep CAR at around 18-20% all the time," he said.

CreditAccess, which acquired 76% in Madura, is awaiting regulatory approval to merge the latter with itself. The balance 24%, now held by erstwhile promoters and employees, will be acquired through share-swap arrangement.

CreditAccess has gross loan portfolio at Rs 11770 crore at the end of November while Madura has it at Rs 2301 crore.